Key Points: 

• A single mother lost healthcare coverage after no longer qualifying for Medicaid and not being able to afford ACA coverage

• Arizona’s Medicaid system, already facing declining enrollment, is bracing for impacts from H.R. 1

• Rural hospitals will likely feel the pinch more because there are more people on Medicaid without dependents

Making only $100 more than an income limit was enough to push Nicole Ray over Arizona’s Medicaid eligibility limit, leaving the single mother of two boys without health insurance and unable to afford medications costing $300 per month. 

Ray, a wheelchair assistant at Phoenix Sky Harbor International Airport, eventually found a plan on the Affordable Care Act’s marketplace for $30 a month, but when enhanced federal subsidies expired last year, her premium jumped to $220. Not able to afford even that, she decided to stop taking several medications, including one used to treat opioid dependence and others for anxiety and depression.

“It’s worrisome to not know if I’ll be able to afford things, how I’ll be able to go forward with like going to the doctor, and I’ll end up having to resort to going to the emergency room and racking up a hospital bill there,” said Ray, 30, who lives in Phoenix. “We’re trying to survive out here.”

Ray’s experience comes as Arizona’s Medicaid program continues to see enrollment drop. This time last year, the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid program, had more than 1.9 million members. By last month, enrollment had fallen to about 1.7 million — a 9% decrease, according to AHCCCS.

That number will likely rise as a result of H.R. 1, more commonly known as the “One Big Beautiful Bill Act,” a federal law imposing new work and reenrollment requirements beginning later this year and continuing into 2027.

In addition to leaving more Arizonans without coverage, the changes could put additional financial pressure on hospitals, particularly in rural communities where Medicaid commonly accounts for a large share of patients. 

According to a March report from consumer advocacy organization The Public Citizen, eight hospitals in Arizona are at risk of closure or reduced services, partly due to H.R. 1 impacts. Six are in Phoenix, one is in Tucson, and one is in Bullhead City.

State officials estimate that H.R. 1, which takes full effect in January, will affect about 418,000 AHCCS members, even though the law does not change Medicaid’s existing income limits.

Currently, the Medicaid income eligibility ranges from about $1,400 to $3,400 a month depending on household size. For a household size of three, the gross monthly income limit effective Feb. 1 is $2,414.

In addition to losing affordable health coverage, Ray said her son’s Nutrition Assistance (also known as Food Stamps) was cut off. The family has appealed but has not yet heard back.  

“I don’t know how it’s too much money when I’m not able to pay all my bills,” she said of not falling below the income limit. She said her income has stayed relatively the same except for the 20- to 30-cent salary increase she gets each year. 

She decided to stop taking her medication, including one for opioid dependency. Ray said she’s been in recovery for more than four years. 

For now, she said she’s doing ok with her medications, but she still worries about getting sick and having to see a doctor. She’s been putting expenses on credit cards, she said. 

“I just weaned myself down against the doctor’s orders and had to withdraw to come off of that,” she said. She was also on mood stabilizers for depression and anxiety. “That was a brutal couple of months.”

As the state department overseeing Medicaid braces for more changes to the system, its focus now is “minimizing disruptions” in coverage, the agency said in an emailed statement.

“H.R. 1 has put that lifeline at risk by creating new hurdles for people to access critical health care,” the statement said. 

To help people navigate the changes, they’ve launched a website called KeepMyAHCCCS.com, which serves as a central resource for information about eligibility requirements, renewals, exemptions and other upcoming changes. 

The new work requirements include earning $580 a month, completing at least 80 hours of other approved activities such as going to school, attending job training or a work program, community service or volunteering, or a mix of those activities. 

Some people can get an exemption from the work requirements if AHCCCS determines they are eligible, according to the website. These exemptions are based on whether the person is Indigenous, has veteran disability status, caregiver status, foster care, living with a disability, a complex health condition or substance use disorder, pregnancy or recent childbirth, meeting requirements for SNAP or TANF, or incarceration. Temporary work exemptions also apply, according to the AHCCCS website. 

Most adults will also now have to renew their AHCCCS coverage every six months, instead of the previous annual requirement.

The department received about $10.2 million in the state budget for eligibility staffing to help with the new work requirements and more frequent eligibility checks. 

Will Humble, executive director of the Arizona Public Health Association, said in a June presentation the practical question will be how fast agencies can hire, train and deploy staff. 

“The appropriation matters, but people will feel the result only if the eligibility machinery works,” he said. 

Humble said income thresholds can get dicey, especially when a person or family gets really close to 138% of the poverty threshold. Even overtime pay can push someone over the income threshold, he said. 

“You gotta really decide where you want to go, because let’s say you’re offered a promotion at work, and it’s a marginal increase, but it throws you over the level,” he said. “You have to think through, ‘OK, if I take this promotion, I might be worse off because I’m going to lose Medicaid. I’m going to have to pay $600 to $1,000 a month or more for my health insurance, and I’ll be worse off than I am today.’”